Chasing down insurance after loans go bad

While JPMorgan Chase’s call center in Albion is closing in September, a business just across the parking lot, Claims Recovery Financial Services, is growing. Jodi Gaines, 45, its chief executive officer, started CRFS at her kitchen table in 2002. Today, her business has about 650 employees spread across three locations, in Albion, Medina and San Antonio, Texas. CRFS is adding 178 jobs, providing new employment for some of the workers from the JPMorgan Chase center.

Gaines once worked in the building that now houses the call center, starting in 1989 when Anchor Bank’s mortgage processing center was there. CRFS specializes in claims processing, and works with about 40 companies, including banks, mortgage servicers and investors. Gaines, who grew up in the Brockport-Holley area, talked about how her the business has grown to handle 20,000 claims per month, and how she plans to diversify its work to keep it viable.

Q: What does CRFS do?

A: When loans are originated, they have maybe FHA insurance or private mortgage insurance, and they would have, in a lot of scenarios, investors who are going to invest in the loans. When those loans go into default and ultimately get foreclosed or liquidated, that’s where insurance kicks in for the servicer. We file the claims to recover what the servicers had to advance. When the borrower stops making payments, the servicer has to pay taxes, insurance, and they’re going to have to obtain an appraisal. If the property becomes vacant, they have to maintain it, such as grass cuts or in the Northeast, winterization. And of course, they’ve hired an attorney to foreclose on the property, so they have attorney fees, attorney costs, etc. We file the claims to recover that money for the banks. And everything is very strict and guideline driven.

Q: What is the scope of your work?

A: Even though we’re after foreclosure or after liquidation, our job is to know what happened all the way through the entire default, and were all the time frames met? And if they weren’t, why? … The big part is getting all your documentation together, gathering it from all the servicers’ vendors to make sure you have all your documentation. We have 100 percent (quality control) here. … Once the claim is perfect, we’ll submit it and start following up for claim payment. Once it’s paid, then we’ll do an analysis to say, ‘OK, here’s what I claimed. What did I get paid?’ And if we disagree with why the investor insurer didn’t pay it, we would file a supplemental, saying ‘We disagree, here’s supporting documentation as to why you should pay these additional funds to the servicer.’

Q: JPMorgan Chase says it is closing its Albion center because fewer customers are going into foreclosure, so it needs fewer employees to provide that work. Do you worry about that trend with your own business?

A: I don’t worry about it. At some point, we figure in maybe four or five years, we’re going to see that change, of course. But we don’t just do foreclosure work. We do loans that have gone through loss mitigation: modifications, short sale, that kind of stuff. We also do some claims that are HUD insured. ... Even though we’ve got four or five years of this, we’re starting to review right now opportunities to diversify a little bit.

The other interesting part of this is, we don’t have much competition. It’s not like the foreclosure attorneys, where there’s 10 in every state that want your business. That’s every state. We’re national, and right now, there’s not much competition. … Our biggest competition is the servicers themselves that do not want to outsource the work.

Q: How is your hiring coming along?

A: We have started to fill some jobs. We definitely want to work with Chase, and applications are starting to come over, which is really, really good. We talked to Chase (human resources). We don’t want to put those employees in a position where they can’t get a job with us or any other [employer]. They still have jobs to do over there, so they can’t let everybody go, but they have told us that they would work with us and further that it wouldn’t impact their severance as long as they worked with Chase. They can’t just go and say, ‘I’m walking out today, too bad.’ They have to work with their managers and work with Chase.

Q: Is there much crossover between what the employees do at the JPMorgan Chase call center and at CRFS?

A: In some areas, there is definitely some crossover, but not a lot. Maybe 20 employees, there’s definitely some crossover. We would just have to give them some additional training, and we always would, no matter what. The others, the nice thing about them is they are familiar with systems, they’re familiar with the process, and the investors and the insurers, and they know everything is very strict and very guideline-driven. And the fact they’re coming from Chase, which is an excellent company that really provides a lot of training and knowledge to their employees, and that we’re going to hopefully benefit from that, is a win-win.

Q: How do you make your work place appealing to employees?

A: One of the things I think we do really well is we do provide the training, and we try really hard to provide a lot of feedback. … Our goal is to keep them engaged and provide them with expectations: ‘Here’s your expectations, and you can meet them or you can exceed them.’ So we try to have really good communication with them, providing feedback in, how’s your productivity, how’s your quality?

The other thing that we do is, we provide a lot of opportunity... We’re going to watch them and if they do well and maybe exceed our expectations, we’re going to say, ‘Hey, there’s a higher position open, are you interested? Maybe you should interview for it.’ We’re not going to hold people back at all. Myself, I was a clerk. I started out at $6 an hour 24 years ago, and I got to move up.